T-Minus 1: Setting EUR Expectations for Tomorrow's ECB Meeting
- EURUSD maintains trend structure from December 17.
- EURGBP triangle remains valid below 0.7750.
- See the DailyFX Economic Calendar for Wednesday, January 21, 2015.
The hurdles for tomorrow's ECB meeting are rather high. Evidence of incoming action has undoubtedly cropped up, with reasons for a massive stimulus program coming from all angles:
- The European Court of Justice last week (essentially) ruled that there were no major legal hurdles between the ECB and a QE program.
- The Swiss National Bank's surprise decision to remove the EURCHF floor in the face of rising costs of maintaining the floor.
- Draghi's preferred market-measure of inflation slumped below 1.200% by the end of last week.
- The ECB balance sheet is mostly unchanged over the past month; the TLTROs and ABS program have been insufficient.
See the above video for our expectations going into the ECB meeting as well as technical considerations and trade ideas in EURUSD, EURGBP, GBPUSD and GBPCAD.
--- Written by Christopher Vecchio, Currency Strategist
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